The pound advanced to the strongest level in more than four years against the dollar this week as signs the U.K. economic recovery is gathering momentum boosted the allure of British assets.
Sterling climbed for a fourth week versus the greenback as data showed growth accelerated in the first quarter and house prices rose at the fastest pace since 2007. The U.K. currency advanced against the euro as a purchasing managers index for manufacturing rose more than analysts forecast. Government bonds were little changed after Bank of England Governor Mark Carney said the recovery is starting to “broaden out” before the Monetary Policy Committee’s interest-rate decision on May 8.
“It has been another constructive week for sterling,” said Peter Kinsella, a senior currency strategist at Commerzbank AG in London. “Data continues to print well, the manufacturing PMI in particular. This increases the pressure on the MPC to raise rates earlier than the other major central banks. The pound has benefited from these developments and will continue to trade at robust levels.”
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